January 13, 2002

Upwardly mobile in the US

In 1835, French aristocrat Alexis de Tocqueville visited America to see how American-style democracy worked. He was not a fan of democracy which he regarded as “perpetually unstable, short-sighted, immature and susceptible to demagoguery and dictatorship”.

Yet he was intrigued by American democracy and how it worked, particularly in the face of mass immigration and huge income inequalities.

In any European country, if a small band of super-rich (this was the beginning of the “gilded age” of Vanderbilts, Astors and Carnegies) ruled over a huge mass of poor workers who were in constant battle with new immigrants for jobs (as was the case in the US), a political revolution would be on the cards. Yet in the US, the system was healthy and stable.

His first observation focused on the American love of commerce. This was alien to many rich continental Europeans at the time, as their wealth was based on land ownership and rent rather than trade and profit. He wrote: “I know of no other country where love of money has such a grip on men’s hearts” and yet he admired America’s “equality of opportunity”.

As de Tocqueville put it, “wealth circulates with inconceivable rapidity and experience shows that it is rare to find two succeeding generations in the full enjoyment of it.” In his view, the crux of American democracy and stability was that even the lowliest immigrant could legitimately aspire to being wealthy within one generation. Similarly, the wealthiest could easily be humbled within a lifetime. Such social mobility prevented social revolutions that would otherwise be triggered by the presence of huge income inequalities.

Fast-forward to today and we see that the US is still characterised by extraordinary social mobility and overwhelming political enthusiasm for mass immigration. In contrast, Europe (Ireland included) is blighted by ongoing class rigidity and a broad aversion to an “open door” immigration policy.

A recent study by the University of Michigan of 7,000 American households surveyed from 1994-1999, reveals that in just five years, almost 30 per cent of the poorest families moved into higher wealth quartiles and 25 per cent of the wealthiest fell back.

Around the middle income, 50 per cent of households either climbed up to a wealthier quartile or fell back to a poorer one. (In contrast, the proportion of Irish working class kids going to university — a long-standing barometer of social mobility — has hardly changed in 20 years.)

This indicates that significant class mobility is still a central cultural characteristic of the USA, while it is hardly evident in Europe. The reality of mobility plus the perception of it, is an important safety valve sustaining the particularly American feeling that much of its social inequality is fair. It also explains why immigration is not perceived as a threat because the new immigrants hop on the class treadmill at the bottom and work their way up without handouts.

In fact, social mobility probably best explains the unique American sense of economic optimism.

The American idea that inequality is fair rests on the fact that inequality is transitory. In contrast, European class rigidity is the norm and, to an extent, social inequality is permanent. This inertia leads to a political aversion to inequality. Coming up to elections, the liberal/left wing of political opinion constantly urges governments to do something about inequality by raising taxes and state spending.

This inequality angst is very evident in the debate on immigration. The Irish and European lack of class mobility explains why immigrants are perceived as a threat. The lack of social mobility reinforces the idea that the economy is like a cake and the more immigrants, the smaller the slice of the cake for everyone else. Such an economic framework can be used to legitimise racially motivated, anti-immigrant views. The fact that someone does not like blacks can be disguised with economic rhetoric about the size of the national cake.

This creates a dilemma for the liberal constituency of Irish politics because it is loath to say anything against immigrants (tut-tutting in radio talk shows if anti-immigrant sentiments are expressed) yet it also supports economic policies that reinforce social rigidity.

Americans argue that the combination of high taxes and government spending forces everyone into the sclerotic middle income.

Such policies are the antithesis of the American low tax and spend approach that has made social mobility possible. Without social mobility, immigration is always going to be a political problem.

Another factor that allows immigration to thrive in the US is that Americans have no problem in admitting that certain citizens are more valuable to society than others: there are second-class citizens.

If a Spanish speaking, unskilled labourer gets to the US, he knows where he stands. He is not regarded by society as being the same as an Ivy League graduate, but if he works hard maybe his kids will go to college. That’s the bargain between the society and the immigrants and Americans argue this bargain threatens nobody. So no politician uses the expression “entitlement”.

Whereas in Ireland, the word “entitled” seems to spring up all over the place. But if I am entitled to something it means someone else has to pay. So in reality, the more a political class harps on about entitlements for new immigrants, the more it raises the hackles of native workers who will end up paying. And if these native workers see themselves stuck in a rigid class structure, it rankles even more.

Americans admit that although the constitution says all men are equal, in reality some men are more equal than others and as long as inequality can be surmounted by hard work, there is no problem with the 12 million immigrants who have come to the US since 1993 and the thousand more who pour in every day.

This economic observation leaves Ireland’s liberal constituency in a quandary. The only way immigrants will be accepted here by the majority (as liberal rhetoric hopes) is if the class system is sufficiently fluid. But a fluid class system means becoming more like the US.

One aspect of becoming more American and creating the incentives for people to move up the social ladder (as well as maintaining the risk of slipping down) is less state involvement in the economy. Yet the Irish left/liberals want precisely the opposite. So there is a significant mismatch between the rhetoric of the left on immigration and the reality of its policies on the economy.

Over the coming weeks and months as the political parties come out with wish-lists masquerading as manifestos, these types of contradiction will become more widespread.

However, given that immigration is now the biggest change facing Europe’s post-war status quo and that in Ireland our policy response is reduced to debating whether an unborn immigrant’s child is a person or not, it seems that immigration is one of the fault lines that will expose some of the more dodgy inconsistencies in Irish political consensus.

Having worked and studied in the US I’d like to rebut
McWilliams’ assertions regarding class mobility – it’s
practically non-existent. Social mobility requires a good
public education system. In the US, public schools are
funded predominantly through the property tax system which
is based on the value of one’s house. Fair, right? Well,
no. Cities are divided into districts and poor districts
do not recieve top-up funding from wealthier districts.
So, the dollar amount per child per annum that a public
school recieves from the local authority can vary from al
low as $200 in the poorest areas to as high as the
c.$10,000 that (for example) New Trier High School,
Illinois, recieves. What chance of improving oneself is
there when the relative poverty is so extreme?